The borrower

The client, a senior managing director at a leading global private equity firm, also serves on the board of a prominent technology company. Following a recent change in personal circumstances, the client was navigating the complexities of divorce while supporting four dependent children.

The problem

The client's objectives included acquiring a new primary residence in South West London, coupled with refinancing and capital raising against a second home. The target property was a five-bedroom semi-detached Victorian villa in South-West London, offering a turnkey solution for the client's needs. Additionally, the client's second home was a newly constructed eight-bedroom residence situated in a sought-after coastal area in the West Country.

The client possessed substantial liquid assets, which they intended to preserve following the target property purchase. Their balance sheet was diverse, featuring multiple listed investments including two sets of restricted stock units (RSUs) with staggered vesting schedules.

The client's property portfolio extended beyond the two homes in question, including a stake in a property due for redevelopment later in the year. Their assets also included private equity investments (co-invest and carried interest) and a personal pension (SIPP), alongside liabilities such as a partnership loan and a car hire purchase. Despite a well-diversified balance sheet, the client's recent divorce introduced substantial financial commitments that affected their net asset value.

The client's income was robust and stable, with a fixed annual salary and a consistent cash bonus history over the past four years. However, the value of discretionary RSUs and carried interest payments had fluctuated, and a significant portion was included within the divorce settlement.

The solution

Investec conducted an in-depth analysis of the client's income and net asset value, taking into careful consideration their financial responsibilities. We were able to utilise his discretionary carried interest as part of the affordability assessment.

To align with the client's desire to maintain their liquidity, we structured a single loan with a 65% loan-to-value (LTV) across both properties. With a credible strategy for repaying the capital at the end of the term, the 15-year loan was arranged on an interest-only basis for the entire duration, providing the client with the financial flexibility they sought.
 

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